Working Paper 184 - Does Oil Wealth Affect Democracy in Africa?
Understanding the effect of oil wealth on democracy is important. National democratic institutions provide a check on governmental power and thereby limit the potential of public officials to amass personal wealth and to carry out unpopular policies. Democracy promotion has thus been at the top of the US and West European foreign policy agenda since the end of the Cold War. Recently rising coups d’états attempts and oil discoveries in some African countries, high energy prices and the North African and Middle East situation characterized by revolutions have made the question of the link between oil wealth and democracy timelier than ever. This paper uses recent data on historical oil wealth to provide new evidence on the effect of oil wealth on democracy in Africa from 1955 to 2008. We find that oil wealth is statistically associated with a lower likelihood of democratization when we estimate the relationship in a pooled cross-sectional and time-series setting. In addition, when estimated using fixed effects, the strong negative statistical association continues to hold. Indeed, this result is robust to the source of oil wealth data, the choice and treatment of the variables set, and the sample selection. Our results also show other interesting and important results. The cross-country evidence examined in the study confirms that the “Lipset/Aristotle/modernization hypothesis” (that prosperity stimulates democracy) is a strong empirical regularity. Also, the propensity for democracy rises with population size, population density, ethnic fractionalization, having British legal origin or colonial heritage, and having a supportive institutional environment in the form of maintenance of the rule of law. However, apart from oil wealth, democracy tends to fall with linguistic fractionalization and rough (mountainous) terrain. Moreover, consistent with the data, North Africa consistently fails to favor democratic development.
|Date of creation:||23 Dec 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (+216) 71 10 39 00
Fax: (225) 21.77.53
Web page: http://www.afdb.org/en/knowledge/publications/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Christa N. Brunnschweiler & Erwin H. Bulte, 2006.
"The Resource Curse Revisited and Revised: A Tale of Paradoxes and Red Herrings,"
CER-ETH Economics working paper series
06/61, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
- Brunnschweiler, Christa N. & Bulte, Erwin H., 2008. "The resource curse revisited and revised: A tale of paradoxes and red herrings," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 248-264, May.
- Goldsmith, Arthur A., 2001. "Foreign Aid and Statehood in Africa," International Organization, Cambridge University Press, vol. 55(01), pages 123-148, December.
- Benhabib, Jess & Rustichini, Aldo, 1996. " Social Conflict and Growth," Journal of Economic Growth, Springer, vol. 1(1), pages 125-42, March.
- Kevin K. Tsui, 2011. "More Oil, Less Democracy: Evidence from Worldwide Crude Oil Discoveries," Economic Journal, Royal Economic Society, vol. 121(551), pages 89-115, March.
- Erich Gundlach & Martin Paldam, 2008.
"A farewell to critical junctures: Sorting out long-run causality of income and democracy,"
Economics Working Papers
2008-04, School of Economics and Management, University of Aarhus.
- Gundlach, Erich & Paldam, Martin, 2009. "A farewell to critical junctures: Sorting out long-run causality of income and democracy," European Journal of Political Economy, Elsevier, vol. 25(3), pages 340-354, September.
- Erich Gundlach & Martin Paldam, 2008. "A Farewell to Critical Junctures: Sorting Out Long-run Causality of Income and Democracy," Kiel Working Papers 1410, Kiel Institute for the World Economy.
- Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2002.
"Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development,"
NBER Working Papers
9305, National Bureau of Economic Research, Inc.
- Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, 06.
- Rodrik, Dani & Subramanian, Arvind & Trebbi, Francesco, 2002. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," CEPR Discussion Papers 3643, C.E.P.R. Discussion Papers.
- Frederick van der Ploeg & Anthony J. Venables, 2012.
"Natural Resource Wealth: The Challenge of Managing a Windfall,"
Annual Review of Economics,
Annual Reviews, vol. 4(1), pages 315-337, 07.
- Frederick van der Ploeg & Anthony J Venables, 2012. "Natural Resource Wealth: The challenge of managing a windfall," OxCarre Working Papers 075, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
- van der Ploeg, Frederick & Venables, Anthony J, 2011. "Natural resource wealth: the challenge of managing a windfall," CEPR Discussion Papers 8694, C.E.P.R. Discussion Papers.
- Anca Cotet & Kevin K. Tsui, 2010.
"Oil and Conflict: What Does the Cross-Country Evidence Really Show?,"
201002, Ball State University, Department of Economics, revised Mar 2010.
- Anca M. Cotet & Kevin K. Tsui, 2013. "Oil and Conflict: What Does the Cross Country Evidence Really Show?," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(1), pages 49-80, January.
- Sven Oskarsson & Eric Ottosen, 2010. "Does Oil Still Hinder Democracy?," Journal of Development Studies, Taylor & Francis Journals, vol. 46(6), pages 1067-1083.
- Andersen, Jørgen Juel & Aslaksen, Silje, 2013. "Oil and political survival," Journal of Development Economics, Elsevier, vol. 100(1), pages 89-106.
- Jess Benhabib & Alejandro Corvalan & Mark M. Spiegel, 2011.
"Reestablishing the income-democracy nexus,"
Working Paper Series
2011-09, Federal Reserve Bank of San Francisco.
- Jesus Crespo Cuaresma & Harald Oberhofer & Paul Raschky, .
"Oil and the duration of dictatorships,"
2008-24, Faculty of Economics and Statistics, University of Innsbruck.
- Jesus Crespo Cuaresma & Harald Oberhofer & Paul Raschky, 2010. "Oil and the Duration of Dictatorships," Monash Economics Working Papers 10-10, Monash University, Department of Economics.
- Crespo Cuaresma, Jesus & Oberhofer, Harald & Raschky, Paul, 2010. "Oil and the duration of dictatorships," Working Papers in Economics and Finance 2010-3, University of Salzburg.
- Daron Acemoglu & Simon Johnson & James A. Robinson & Pierre Yared, 2007.
"Reevaluating the Modernization Hypothesis,"
NBER Working Papers
13334, National Bureau of Economic Research, Inc.
- Jess Benhabib & Adam Przeworski, 2006.
"The political economy of redistribution under democracy,"
Springer, vol. 29(2), pages 271-290, October.
- Adam Przeworski & Jess Benhabib, 2004. "The Political Economy of Redistribution under Democracy," 2004 Meeting Papers 58, Society for Economic Dynamics.
- Peter Boone, 1996. "Political and Gender Oppression as a Cause of Poverty," CEP Discussion Papers dp0294, Centre for Economic Performance, LSE.
- Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 2004.
"Do Institutions Cause Growth?,"
NBER Working Papers
10568, National Bureau of Economic Research, Inc.
- Kevin K. Tsui, 2010. "Resource Curse, Political Entry, And Deadweight Costs," Economics and Politics, Wiley Blackwell, vol. 22(3), pages 471-497, November.
- Silje Aslaksen, 2010. "Oil and democracy: More than a cross-country correlation?," Journal of Peace Research, Peace Research Institute Oslo, vol. 47(4), pages 421-431, July.
- Irene Vlachaki & Sarantis Kalyvitis, 2011.
"When does more aid imply less democracy? An empirical examination,"
DEOS Working Papers
1125, Athens University of Economics and Business.
- Kalyvitis, Sarantis & Vlachaki, Irene, 2012. "When does more aid imply less democracy? An empirical examination," European Journal of Political Economy, Elsevier, vol. 28(1), pages 132-146.
- Christa Deiwiks & Lars-Erik Cederman & Kristian Skrede Gleditsch, 2012. "Inequality and conflict in federations," Journal of Peace Research, Peace Research Institute Oslo, vol. 49(2), pages 289-304, March.
- Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
- Casey B. Mulligan & Kevin K. Tsui, 2008. "Political Entry, Public Policies, and the Economy," NBER Working Papers 13830, National Bureau of Economic Research, Inc.
- Audrey Menard, 2012. "Why foreign aid does (not) improve democracy?," Working Papers of BETA 2012-19, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
- World Bank, 2013. "World Development Indicators 2013," World Bank Publications, The World Bank, number 13191.
- repec:ucp:bkecon:9780226731445 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:adb:adbwps:988. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Adeleke Oluwole Salami)
If references are entirely missing, you can add them using this form.